Decades After Helping a Nation Emerge, Watching It Struggle

An overcast day in downtown Lisbon. Portugal’s dictatorial regime was overthrown in 1974, ushering in a new democracy. An overcast day in downtown Lisbon. Portugal’s dictatorial regime was overthrown in 1974, ushering in a new democracy. (Photo: João Pedro Marnoto / The New York Times)Back in 1975, shortly after the overthrow of the dictatorship that had ruled Portugal for half a century, the governor of the country's central bank, Jose da Silva Lopes, called on his old friend Dick Eckaus, a professor at the Massachusetts Institute of Technology, to see if he could get some economists from M.I.T. to come to Portugal and offer expert advice.

Sure enough, a team consisting (I think) of Mr. Eckaus, Rudi Dornbusch and Lance Taylor showed up (I'm pretty sure Bob Solow also visited). They apparently did fine work updating the national accounts, among other things, and Mr. Silva Lopes wanted more. Unfortunately, senior M.I.T. faculty members were not available.

So, in the summer of 1976 they got five M.I.T. graduate students: Miguel Beleza (a Portuguese national who would later serve as governor of the central bank and finance minister), Andy Abel, Jeff Frankel, Ray Hill (who went off into the private sector) and me.

Judging by later academic reputations, the Portuguese got quite a group! The next year, by the way, they got David Germany, Jeremy Bulow and — guess who? — Ken Rogoff.

Portugal in the summer of 1976 was a bizarrely interesting place — still somewhat chaotic in the aftermath of the coup and the country's withdrawal from its African empire (the hotels were filled with "returnees" from Africa, placed there on a temporary basis). Lisbon often seemed like a fossil, with much of its appearance and infrastructure little changed since the Edwardian era.

Democracy seemed shaky, although the truth was that the Maoist posters everywhere were deceptive; the democratic left had won pretty decisively by the time we arrived (although East German programs about tractors were still being shown on television, even as the film theaters caught up on a decade of Western pornography).

The country, in short, was fascinating, lovable and still very poor.

We had a reunion conference 25 years later, and Lisbon was, to be frank, a bit disappointing: it had become a normal, if charming, European city.

But this normality was, as we all recognized, a wonderful thing, since Portugal had emerged from its long, troubled history to become part of the European social model and its basic decency.

And now all of that is under siege.

I sometimes encounter Europeans who think my harsh criticism of the troika (the European Central Bank, the European Commission and the International Monetary Fund) and its policies means that I'm anti-European. On the contrary: the European project, the construction of peace, democracy and prosperity through union, is one of the best things that ever happened to humanity.

And that's why the misguided policies that are tearing Europe apart are such a tragedy.

A Brief Note on the Krugman-Bashing Industry

Fairly often I receive comments or other communications asking me to respond to X or Y, who has said Z about me and/or my arguments. For the most part, I am not going to oblige. Why?

The main answer: sheer capacity constraints.

In case you haven't noticed, Krugman-bashing is a huge industry — so huge that I would feel guilty about diverting so many productive resources from other activities, if it weren't for my strong suspicion that most of these resources would in fact be destructive wherever else they might be applied. I'm actually providing a public service by keeping these guys busy.

Decades After Helping a Nation Emerge, Watching It Struggle

An overcast day in downtown Lisbon. Portugal’s dictatorial regime was overthrown in 1974, ushering in a new democracy. An overcast day in downtown Lisbon. Portugal’s dictatorial regime was overthrown in 1974, ushering in a new democracy. (Photo: João Pedro Marnoto / The New York Times)Back in 1975, shortly after the overthrow of the dictatorship that had ruled Portugal for half a century, the governor of the country's central bank, Jose da Silva Lopes, called on his old friend Dick Eckaus, a professor at the Massachusetts Institute of Technology, to see if he could get some economists from M.I.T. to come to Portugal and offer expert advice.

Sure enough, a team consisting (I think) of Mr. Eckaus, Rudi Dornbusch and Lance Taylor showed up (I'm pretty sure Bob Solow also visited). They apparently did fine work updating the national accounts, among other things, and Mr. Silva Lopes wanted more. Unfortunately, senior M.I.T. faculty members were not available.

So, in the summer of 1976 they got five M.I.T. graduate students: Miguel Beleza (a Portuguese national who would later serve as governor of the central bank and finance minister), Andy Abel, Jeff Frankel, Ray Hill (who went off into the private sector) and me.

Judging by later academic reputations, the Portuguese got quite a group! The next year, by the way, they got David Germany, Jeremy Bulow and — guess who? — Ken Rogoff.

Portugal in the summer of 1976 was a bizarrely interesting place — still somewhat chaotic in the aftermath of the coup and the country's withdrawal from its African empire (the hotels were filled with "returnees" from Africa, placed there on a temporary basis). Lisbon often seemed like a fossil, with much of its appearance and infrastructure little changed since the Edwardian era.

Democracy seemed shaky, although the truth was that the Maoist posters everywhere were deceptive; the democratic left had won pretty decisively by the time we arrived (although East German programs about tractors were still being shown on television, even as the film theaters caught up on a decade of Western pornography).

The country, in short, was fascinating, lovable and still very poor.

We had a reunion conference 25 years later, and Lisbon was, to be frank, a bit disappointing: it had become a normal, if charming, European city.

But this normality was, as we all recognized, a wonderful thing, since Portugal had emerged from its long, troubled history to become part of the European social model and its basic decency.

And now all of that is under siege.

I sometimes encounter Europeans who think my harsh criticism of the troika (the European Central Bank, the European Commission and the International Monetary Fund) and its policies means that I'm anti-European. On the contrary: the European project, the construction of peace, democracy and prosperity through union, is one of the best things that ever happened to humanity.

And that's why the misguided policies that are tearing Europe apart are such a tragedy.

A Brief Note on the Krugman-Bashing Industry

Fairly often I receive comments or other communications asking me to respond to X or Y, who has said Z about me and/or my arguments. For the most part, I am not going to oblige. Why?

The main answer: sheer capacity constraints.

In case you haven't noticed, Krugman-bashing is a huge industry — so huge that I would feel guilty about diverting so many productive resources from other activities, if it weren't for my strong suspicion that most of these resources would in fact be destructive wherever else they might be applied. I'm actually providing a public service by keeping these guys busy.